IGPN - International Green Purchasing Network

January 31, 2017

Deforestation-free commodities represent a major investment opportunity: Report

31 January 2017 / Mike Gaworeck

It’s estimated that about 10 percent of global emissions comes from deforestation — meaning we could make considerable progress toward halting climate change simply by keeping what remains of the world’s forests standing.

Agricultural commodities — especially beef, palm oil, soy, and pulp and paper — have become an increasingly important driver of deforestation over the past couple decades, particularly in the tropics.

A December 2015 study found that the production of those four commodities in just seven countries (Argentina, Bolivia, Brazil, Paraguay, Indonesia, Malaysia, and Papua New Guinea) led to an average deforestation area of 3.8 million hectares (9.4 million acres) and land use change emissions of 1.6 gigatonnes CO2 equivalent (GtCO2) per year between 2000 and 2011. That’s 40 percent of total tropical deforestation and 44 percent of associated carbon emissions, due to the production of just four commodities in seven countries.

The production of these commodities in the tropical forest regions of Latin America, Southeast Asia, and Sub-Saharan Africa is worth roughly $180 billion every year, according to a new report by the World Economic Forum (WEF) and Tropical Forest Alliance 2020 (TFA 2020). But transforming the global supply chains for beef, palm oil, soy, and pulp and paper so that they are truly sustainable “is an investment opportunity to the tune of roughly $200 billion a year,” Marco Albani, the director of TFA 2020 and a member of the executive committee at WEF, wrote in a blog post accompanying the release of the report.

This is an opportunity that the financial sector can capitalize on “by scaling up emerging models of deforestation-free finance,” Albani adds.

Since the adoption of the New York Declaration on Forests (NYDF) in 2014, the number of deforestation-related pledges made by the private sector has continually increased. A progress report on the NYDF released last year by Climate Focus found that the number of companies making commitments to protect forests had jumped to 415, up from 307 the previous year.

Of the deforestation commitments made by companies active in the trade of the four major agricultural commodities, which can cover more than one commodity, the majority address palm oil (59 percent) and wood products like pulp and paper (53 percent). Despite representing a much larger share of global deforestation, the soy and cattle supply chains are the subject of significantly fewer commitments — 21 and 12 percent, respectively.

Read more at MONGABAY.

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